UKRN work on vulnerable consumers

Last Friday (1/3/2019) Citizens Advice published research setting out that people with a mental health problem can pay a premium of over £1000 every year, calling for action from Regulators.

UKRN agrees that people with mental health conditions must be offered the right support by utilities, communications and financial providers. We are already working together to ensure that vulnerable consumers, including those with mental health conditions, are fairly treated, and can better access products and services that meet their needs and offer value for money.

UKRN and regulators are developing a set of consistent guidelines on power of attorney, for use across telecoms, water, energy and financial services, with more information due in the spring. We’re also working on best practise and minimum standards for vulnerable consumers, which has included input from Scope and Money and Mental Health Policy Institute.

Ofgem – In the energy sector:

Energy suppliers are required, through their licence conditions, to make an extra effort to identify and respond to the needs of consumers in vulnerable situations. We monitor energy companies’ performance on support provided to customers in vulnerable situations in our annual vulnerability reports, where we highlight poor performance and share example of good practice. Where we do not see sufficient improvement, we are ready to take compliance or enforcement action to protect consumers’ interests.

Energy suppliers and distribution network companies are required to offer free services to customers who are in a vulnerable situation and need additional support in relation to access, communication and/or safety in regards to their energy supply, also known as the Priority Services Register. We have clearly said that examples of circumstances that could be deemed as ‘vulnerable’ include customers with certain mental health conditions, which can impact on their engagement with energy bills.

Energy suppliers are prohibited from installing prepayment meters under warrant for the purposes of recovering debt where the process would be severely traumatic due to a consumer’s mental capacity and/or psychological state.

A substantial package of changes to the rules around how energy suppliers communicate with their domestic energy customers came into effect in February 2019. We want consumers to get the right information, in the right form and at the right time, to enable them to understand their costs and consumption, to access and assess their options, and to take action where appropriate.

One of the main themes we have identified where improvements can be made for consumers in vulnerable situations as part of our upcoming update of the Consumer Vulnerability Strategy (CVS 2025) is driving a step change in customer services and improving identification of vulnerability.

Ofcom – In the telecoms sector:

Ofcom has introduced a new General Condition (the rules all companies must follow) in October 2018, which means that firms will be required to publish their policy about treating all vulnerable customers fairly, and offer them additional help if necessary;

Ofcom is monitoring the impact of our General Condition on vulnerability (GC C5) and will identify examples of best practice, which we will share through industry events and a guide.

Protecting consumers from harm is one of the three strategic goals Ofcom has set in this year’s proposed annual plan. We want to ensure vulnerable customers are protected and we will intervene directly to ensure this will happen.

Ofwat – In the water sector:

Several companies put forward performance commitments to support the proposed growth of their priority services register in 2020 – 2025. The register includes those with mental health issues.

In addition, all companies must now adopt a performance commitment based on the following specifications:

Companies should register a minimum of 7% of households by 2024-25. Companies may choose to set a level that is higher than this minimum level.

When setting the new target, companies should consider the needs of customers in vulnerable circumstances in their region by consulting available data and engaging with relevant third parties.

Companies should contact a minimum of 90% of registered customers every two years to make sure they are still getting the right support.

If a company has already proposed a performance commitment to increase the coverage of their register, they must adapt their commitment to meet the specifications above.

All companies must adopt this performance commitment by 1 April 2020.#

FCA – In financial services:

The FCA’s objectives are to secure appropriate protection for consumers, protect and enhance the integrity of the UK financial system, and to promote effective competition in consumers’ interests. We also have obligations to consider consumers’ different financial needs.

Understanding vulnerability is central to how we make decisions. Consumers in vulnerable circumstances are more susceptible to harm and generally less able to advance their own interests. The FCA’S Mission clearly states our intention to prioritise consumers who are unable to shop around, over consumers who can shop around but choose not to do so.

Since publishing our Occasional Papers on Consumer Vulnerability in 2015 and Access to Financial Services in 2016, we have used our influence as a regulator to challenge the industry on its treatment of vulnerable consumers and stimulate debate on wider access issues. We have seen significant improvement, for example, in how retail banks treat vulnerable consumers.

The FCA helps address access issues that fall within our objectives and the regulatory framework we have developed. For example, following our paper on Access to Financial Services, we looked at access issues in the travel insurance sector. We are also developing guidance for firms on the treatment of vulnerable consumers.